Geely and Foxconn form partnership to build cars for others

Taiwan's Foxconn and Chinese automaker Zhejiang Geely Holding Group said on Wednesday they will join hands to provide contract manufacturing for automakers.

They will each hold 50% of a venture that will also provide consulting services on electric vehicle (EV) technologies to automakers, the companies said in a statement.

It marks the latest move by Foxconn, a major Apple Inc supplier, into autos after a tie-up with Chinese electric car startup Byton and comes amid reports that Apple is likely to launch a self-driving electric car by 2024.

For Geely, the partnership will allow it to share its first EV-focused platform, launched in September, with other automakers, according to people familiar with Geely's plan.

It is also the second deal this week announced by Geely, which said it will work with Chinese search engine giant Baidu Inc to make electric vehicles.

Geely, which owns Volvo Cars and holds 9.7% of Daimler AG, is keen to improve the capacity utilisation rate of its plants around China, said the sources, who were not authorised to speak to media and declined to be identified.

Its main listed company, Geely Automobile, has the capacity to build more than 2 million vehicles a year but sold only some 1.32 million in 2020. Geely Automobile plans to issue shares on mainland China's STAR board this year.

Foxconn, whose official name is Hon Hai Precision Industry Co Ltd, said in October it aimed to provide components or services to 10% of the world's EVs by 2025-2027.

Geely shares climbed 1% on the news. Foxconn shares finished 2.4% higher prior to the companies' announcement.